We provide evidence on how individual venture capitalists (VCs) add value to startups, using exogenous deaths of VC directors on startup boards. Losing a VC director increases the probability of startup failure, delays a successful exit, and reduces the IPO likelihood. Affected startups that raise capital after a director loss obtain a narrower investor base. These effects persist after the replacement of deceased VCs, indicating the importance of the original deal experts for startup survival, financing, and going public. In contrast, losing a VC director does not affect recruitment, product development, and CEO replacement, suggesting that these skills are replicable. Overall, a VC’s network and reputation are key irreplaceable assets.

This paper studies how implicit discrimination affects investment decisions through real-stakes experiments involving real US venture capitalists. When evaluating multiple startup profiles with randomized founders, participants’ ratings of women-led and Asian-led startups significantly decrease when they become rushed. This bias is stronger for high-quality startups, driven by investors’ implicit beliefs that these startups yield lower returns. Moreover, investors’ evaluations from the last half of the study have stronger correlations with their donation behaviors and real-world investments, underscoring the role of implicit discrimination. Additionally, investors spend less time on pitch emails from women and Asians when handling emails late at night.

Does reducing the cost for entrepreneurs to write more complete contracts with their financiers enhance entrepreneurial success? To shed light on this question, this paper exploits a 2008 French reform that made it less costly for new firms to choose a legal form allowing more complete financial contracts in the company bylaws. Using comprehensive tax-filing data from 2004 to 2015, we find a marked increase in the adoption of that legal form among new firms, leading to higher growth in capital, labor, and revenues in the first three years after creation. The effects are more pronounced for firms with high marginal returns to capital, suggesting that capital misallocation decreases. Our findings highlight the significant role of legal and financial structures in entrepreneurial success, which has policy implications for promoting entrepreneurship.